Intellectual capital and performance of automotive manufacturers: the role of strategic thinking

Abstract

Purpose: The purpose of this paper is to investigate the influence of intellectual capital (IC) on the performance of Malaysian automotive manufacturing firms. It also examines the role of strategic thinking (ST) as a moderating variable in the relationship between IC and performance in these firms. Design/methodology/approach: This study used a quantitative approach, with an initial sample of 228 firms in Malaysia. Partial least squares structural equation modelling (PLS-SEM) was employed to test the study hypotheses. Findings: The results of the PLS-SEM analysis are as follows: Human capital (HC) and relational capital (RC) have significant effect on performance, but not structural capital (SC). ST has no moderating effect on the relationship between RC or SC and performance although it does moderate the relationship between performance and HC. Research limitations/implications: Together with the government, CEOs hold responsibility for ensuring that organizations practice effective ST and IC. With the assistance of government, CEOs should exert every effort to be leaders in this matter. In addition, CEOs of automotive manufacturing firm should reduce their emphasis on classical ways of managing organizations processes. Practical implications: The findings offer guidance to automotive firms considering how to develop IC and ST to improve performance, especially in Malaysia and Southeast Asia. Originality/value: This is the first study to examine the moderating effect of ST on the relationship between IC and performance worldwide.